Mandatory CSR spend issue back in focus

The Ministry of Corporate Affairs has once again tweaked its corporate social responsibility (CSR) clause to strengthen its provisos, CNBC TV-18 reporetd on Thursday.

hidden August 30, 2012 18:00:55 IST
Mandatory CSR spend issue back in focus

The Ministry of Corporate Affairs has once again tweaked its corporate social responsibility (CSR) clause to strengthen its provisos, CNBC TV-18 reporetd on Thursday.

The reworked clause is in the draft Companies Bill note for the Cabinet.

The draft note has dropped the word 'endeavour' in its CSR clause, according to a CNBC TV-18 report.

The fresh clause decrees that companies 'shall ensure' 2% of net profit (NP) is spent on CSR.

The move is after the House Panel on Finance objected to the term 'endeavour'.

Mandatory CSR spend issue back in focus

Yashwant Sinha.

The Ministry of Corporate Affairs sources said that tightened CSR provisos are due to the House Panel's objections

However, MCA sources told CNBC TV-18 that CSR will not be made mandatory and the 'explanation' clause will be retained.

BJP leader Yashwant Sinha sais that it shold be clearly mentioned why companies are investing in CSR.

"I am happy that the MCA has dropped the term 'endeavour' from the Comapanies Bill. I am hopeful that the Cabinet will approve the new CSR provision," Sinha told CNBC TV-18.

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